Testing and analytical services provider ALS Ltd is reviewing its oil and gas operations after ongoing volatility in the sector helped widen the group's annual loss to $240.7 million.
Revenue and earnings fell in ALS's minerals and energy divisions, but the group's largest division, life sciences, generated record revenue and operating profit.
Shares in ALS were 49 cents, or 10.91 per cent, lower at $4.00 at 1414 AEST.
ALS says it is evaluating its energy operations to ensure that the business matches the current environment.
"A major element of the review is to rebase the operating model to reduce the cost base to sustainable levels," ALS managing director Greg Kilmister said on Monday.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
"The objective is to get the oil and gas business to a break-even point by September this year under current very poor market conditions."
ALS said there was widespread uncertainty over commodity prices. Oil prices have fallen more than 25 per cent over the course of the year, and Chinese demand for metals has faltered.
The group's energy and minerals divisions were faced with more cuts to exploration and development activity and aggressive cost-cutting initiatives from producers.
The number of operational rigs and wells in the oil and gas sector fell 36 per cent over calendar 2015, leading to a drop of 30 per cent, or $US100 billion ($A139.23 billion), in global drilling expenditure.
The energy division's underlying earnings plunged 76.6 per cent to $13.8 million.
The minerals division's underlying earnings fell 15.3 per cent to $81.7 million.
But in life sciences, which provides analytical testing and sampling services for the environmental, food, pharmaceutical and consumer products markets, underlying earnings lifted 12 per cent to $145.1 million.
The life sciences division grew its market share and continued to diversify geographically, making small acquisitions in food and environmental testing in Europe.
ALS said it was evaluating more small acquisition targets in the food sector in Europe and North America.
The group's loss for the year to March 31, 2016, was 37.9 per cent worse than the loss of $174.5 million in 2015.
The loss was primarily due to impairment charges of $314 million against its oil and gas services business, which was flagged in February, it said.
Excluding one-off items, ALS's profit was down 27 per cent at $99.5 million, compared to the underlying profit of $135.4 million in 2015.
ALS'S FULL-YEAR RESULTS
* Net loss 37.9 pct worse at $240.7m
* Revenue down 8.6 pct at $1.36bn
* Final dividend of 6.0 cps, partly franked, down from 10 cps
